Is Iridium Back?

from the nah,-probably-not dept

Is Iridium back? The company that bought billions of dollars worth of assets from the original Iridium for just $25 million (and immediately signed a contract for $72 million from the US Dept. of Defense) is saying they're back and better than the original Iridium. They may be back, and they may even be better, but some still think they're going to fail. At least they're not trying to be all things to all people, and they've lowered the costs of the damn thing. However, it's still really expensive, and cell phone service and coverage is increasingly getting better. If anything, Iridium's market is going to keep shrinking over time.

Huh?

Iridium's market is not the same as the cellphone market - the fact that cellphoen coverage is getting better in the USA is entirely irrelevant (The civilised world has perfectly good coverage already, thank you). Iridium is for places like the Amazon jungle or the Himalyas whioch are never going to have cellphone coverage.

Mike, the amazon market is indeed a small market compared to the larger markets out there, but you are not looking at the whole picture. There are plenty of places not already populated with no cell coverage, in addition to our vast giant oceans. Take a look at this URL for more information on world population density http://en.wikipedia.org/wiki/Population_density . Don't make the assumption that just because these places are so remote that someone needing a phone would not be there. That is a very naive assumption. I think Iridium is great for that other market needing phones where coverage is not available.

Re:

Ricardo,

I think you misread the point of my post. I'm not saying that those markets don't exist, just that they're small and shrinking. For the people who want it, that's great. The point was that Iridium was supposed to be this big, mass market product, and it's obviously a very niche one.

I know that there are places where there's no cell service. The point is that the market size for catering to those people is small.

In Support Of Mike

Mike is right on this one. You commentors are both correct that dis-connected places DO exist, and will for a long, long time. But Iridium, and other failed Satellite Internet companies were not planning on making a living selling services to these most remote places.

In fact, their business plans, hashed out in the late 80s, included revenues from cities and urban areas in places like Africa and the Amazon. But by the time the satellite services launched, these urban areas had been covered by terrestrial cellular. Thus, a huge chunk of the expected revenue and market opportunity vanished, leaving the long tail of people who want to connect in the middle of nowhere.

I was in the Amazon, on the river itself... talking on my freaking cellphone! Sure, I was near Manaus at the time, but so were most of the other people in the region who could afford, and wanted, to make a phone call. Surely there were a few folks upriver who might by an Iridium phone, but put them all together from around the world, and you don't have enough customers to fund the business. And that fact is proven.